In a world where an increasing majority of individuals are online and the business community leverages the Internet as its primary communication vehicle, the efficiency of online advertising is becoming increasingly important. The objectives of online advertising are the same as traditional direct mail, television and even email advertising, specifically, to identify the appropriate audience for a product or service and get a message in front of them in a manner that generates the most return on investment.
In the early days of Internet advertising, one of the most effective ways to reach promising prospects for purchase of goods and services was to simply advertise on sites that attracted a viewership most closely aligned to a target audience. This approach was successful for some time, but online audiences increased and too many individuals began accessing the same national news, sports and entertainment sites. While this was attracting national consumer advertisers, it also tended to increase the demand and as a result it squeezed out the local and regional advertisers.
Advertising (ad) networks began to solve the problem of increasing the pool of unique users/individuals that can be reached across many sites and via many different areas of interest (i.e. the user's particular interests, and what type of content he/she would access on the Internet). Ad inventory was, thus, bundled and resold by ad networks. This centralization of the inventory helped to bring scale to the industry but did essentially nothing to qualify an audience's interests, or make the process more transparent to advertisers.
An advance in online advertising arrived with the introduction of the web browser-based cookie. In order to improve the efficiency of the online experience, cookies are used to shortcut activities such as logging in to individual first party accounts. Publishers of web sites use browser cookies to identify their users or to identify prior visitors and even people who made, or almost made, a purchase from an online store. Cookies became the tool of the trade in the online advertising industry several years ago and have become the standard. Much of advertising online today is cookie-based, often also including a behavioral targeting, cookie based, component.
Three challenges that the industry currently faces can be categorized as Reach, Data Integrity, and Privacy.
Recently, the online ad industry has centralized around an audience targeting methodology in order to increase the effective reach for campaigns to unique users via web-based content. With audience targeting infrastructure ad networks and exchanges centralized, or pooled, cookies can be applied across most publisher web sites. Audience targeting effectively aggregates all the cookie-based traffic into large pools of end users who can be characterized anonymously as ad segments. In a need to aggregate more available inventory cookies are increasingly brokered and resold through data exchanges and data management platforms to third parties for promoting related products and services. The first party relationship between the user and the publisher site has effectively become a commodity that the publishers have started to monetize by placing a cookie on their end users when they visit or transact on the publishers site, and then reselling that association to third parties. The reselling of the cookies through brokers or directly to a third party is currently permissible under industry self-regulating guidelines if the cookie is scrubbed of any personally identifiable information.
An additional reach challenge with cookies is that they are volatile. They can be blocked by the user, be manually deleted from a user's computer, and/or time-out after a period of time. When this happens there is an inability to associate the online user with cookie information, and the ad inventory is reduced or devalued. As the world becomes more digitally complicated and the prevalence of cookies expands, the number and storage of cookies on the browser becomes more volatile and transient. In addition, users with multiple devices or software browsers that access a publisher web site are treated in a manner where each of those entities is a separate user. This increases the cookie pool temporarily. However the number of actual unique users diminishes. At any given time a small minority of the online public will have an active cookie that fits the specific needs of the advertiser. The use of cookies can make the user experience potentially more efficient but the centralization of the ad inventory and the inefficiency of the behavioral targeted cookie to reach qualified audiences at scale is a business challenge.
When a cookie is made available it is almost always based on a minimal number of behavioral data points, and often those data points are inferred. Each cookie can only be differentiated by the data that has been associated with it but the associations that connect a cookie to a segment are often based on information as thin as a site visit, or an individual purchase. Thin data is desirable because there is no current behavioral targeting mechanism to collect the amount of data required to determine whether a user is in the market or can afford the product or service being offered. The data integrity issue is exacerbated because of the persistent lack of qualified and active inventory in each segment. A lack of data integrity reduces the quality of the audience and the effectiveness of the advertising.
The online advertising industry has promoted a self-regulatory policy of notice to users that they are being tracked and corresponding opt-out provisioning at the browser level. Cookies are being actively challenged on privacy concerns because the audience generally does not want their browsing history captured and resold because they want to control which parties have access to their personally identifiable information. The United States FTC, White House, and Industry's Privacy Coalition have recently agreed to a policy of Do Not Track. This policy may be implemented through legislation.
The business challenges and current legislative environment could, thus, force the ad industry and browser manufacturers to reduce complication and allow users to opt-out or to block cookies more transparently and persistently. These market forces will create a greater need for an alternative advertising targeting solution that provides better reach, data integrity and privacy than the existing industry standard of behavioral targeting and cookies.
Thus, it is desirable to provide a system and method that allows the targeting of advertising and marketing information to internet users without the need to track user data or store information related to particular internet users.